Credit, Risk & Quantitative Finance 2016 Salary Guide

Sam Turner 25.02.2016

At Morgan McKinley, we endeavor to provide up-to-date market insight and expert knowledge on your sector. Here we offer key recruiter information across Credit, Risk and Quantitative Finance, covering permanent and temporary salaries across London and South West England.

London

Leap in salaries at AVP level

Over the past 12 months there has been an uplift in recruitment for credit analysis in response to increased trading activity. Candidates with exposure to FTSE 100-250 corporates and leveraged deal experience are in demand. Within market risk, stress testing has been a major focus as a result of regulatory pressures, with reduced emphasis on straight-line market risk analysis, such as looking at asset classes. In terms of seniority, most recruitment has been at the middle level (AVP to VP) with less activity at the Director or Analyst level. Salaries in this space have increased significantly. Movement in 2016 will continue to be more driven by career progression.

High-quality candidates have been motivated to move to advance their medium-term career prospects rather than in pursuit of higher salaries, although there is frustration at the lack of opportunities at Director level.

Greater technical focus

Contract recruiting has been largely driven by regulatory requirements. The changes under the fundamental review of the Trading Book (FRTB) under Basel IV was to be finalised by 2017, yet this now appears to be being delayed and therefore, there shall be less of an emphasis on this regulatory requirement. Some banks have started early to try and get ahead in terms of running quantitative impact studies (QIS) and working out how to make methodology changes for expected shortfall and the regulatory driven stress tests. Yet budget relating to FRTB should now be reduced. Where we might see an increase in hiring shall be on the requirements from the regulators to perform intra-day stress testing. However this may prove to be a huge headache for the banks.

Unlike the permanent recruitment market, there has been low demand for credit analysis on the contract side will. Credit analysis is the only area within risk where companies pay considerably more to permanent staff than contractors. The contract work tends to be focused on annual reviews of portfolios, whereas on the permanent side it is much more technically challenging and closer to a revenue generating role.

Operational risk seems to be on the increase with a greater focus on loss data and the higher regulatory capital requirements relating to operational risk losses. There is more of a definition around the three lines of defence model and an increase in internal audit and controls testing from the point of view of making the functions more robust.

The sheer speed of the regulatory changes and technological landscape is making it difficult to match existing skill sets to the new needs. Hiring organisations will therefore often look to recruit at a more junior level. However, they onlyconsider candidates with superb academic qualifications who can adapt quickly to the wide range of software tools and new programming languages, which are used to perform a variety of analyses and simulations. In general, the contract market is becoming more and more technically focused. There have only been moderate increases in daily rates over the last year which will follow on into 2016.

Permanent - London
Basic Salary (£ Per Annum)
Role	Analyst 0-2 Years	AVP 3-4 Years	VP 5-7 Years	Director 8-9 Years	MD 10+ Years
Market Risk Management	40,000-50,000	55,000-80,000	80,000-120,000	120,000-160,000	175,000+
Market Risk Control	40,000-50,000	50,000-75,000	75,000-120,000	125,000-175,000	150,000+
Investment / Portfolio Risk	40,000-55,000	55,000-75,000	75,000-110,000	115,000-150,000	150,000+
Credit Analysis	40,000-50,000	50,000-75,000	75,000-120,000	125,000-175,000	150,000+
Credit Risk Control	40,000-50,000	50,000-65,000	70,000-100,000	100,000-130,000	130,000+
Operational Risk Management	40,000-50,000	50,000-80,000	80,000-120,000	120,000-160,000	160,000+
Quantitative Risk Analysis	50,000-65,000	60,000-80,000	80,000-130,000	120,000-160,000	175,000+

Temporary - London
Rate (£ Per Day)
Role	Analyst 0-2 Years	AVP 3-4 Years	VP 5-7 Years	Director 8-9 Years	MD 10+ Years
Market Risk Management	200-250	250-450	450-600	600-750	750-1,000
Market Risk Control	150-200	200-300	300-400	400-500	500-750
Investment / Portfolio Risk	200-250	250-450	450-600	600-750	750-1,000
Credit Analysis	150-200	200-250	250-300	300-450	450-600
Credit Risk Control	150-200	200-300	300-400	400-500	500-750
Operational Risk Management	200-250	250-450	450-550	550-600	600-700
Quantitative Risk Analysis	200-250	250-450	450-600	600-750	750-1,000

South West England

Upward pressure on salaries

General risk is a growing market in the South West with demand for candidates who have a broad range of skills in general risk and control, credit risk, market risk and operational risk. Anyone with regulatory knowledge and/or experience in SAS risk modelling, in particular, will have no trouble finding a role and salaries are being driven upwards. Some financial services companies are looking to move back office functions out of London to reduce costs, so we expect the demand to increase and there will be more opportunities for specialists.

Basic Salary (£ Per Annum)
Permanent - South West
Role	Analyst 0-2 Years	AVP 3-4 Years	VP 5-7 Years	Director 8-9 Years	MD 10+ Years
Risk and Control	20,000-27,000	27,000-35,000	35,000-50,000	50,000-70,000	70,000-85,000
Credit Risk	20,000-30,000	30,000-38,000	38,000-50,000	50,000-70,000	70,000-100,000
Operational Risk	18,000-25,000	25,000-35,000	35,000-45,000	45,000-65,000	65,000-90,000
Market Risk	20,000-30,000	30,000-38,000	38,000-50,000	50,000-70,000	70,000-100,000